In a relationship, few things are as exciting as the prospect of living together. It’s a big step, and it’s one that shouldn’t be taken lightly. No one wants to be a buzz kill or undermine all the romantic parts of anticipating a shared home and a life together. At the same time, as you address the practical matters of cohabitation, you’ll want to consider the legal issues that could arise if the relationship doesn’t work out.
This is particularly true if you choose not to marry. Marriage provides certain rights, which have only been available to same sex couples since the Obergefell decision legalizing so-called gay marriage in 2015. That said many couples, of all kinds, choose to live together without being married, and there are issues to be aware of. Whereas married couples would have to settle issues in a divorce, couples who are merely cohabiting are vulnerable to legal action, which can be both financially and emotionally draining. In my practice, I’ve had to handle a number of cases of couples separating in which one party chooses to sue the other for distribution of assets and income. All these cases have a couple of things in common. Either the parties didn’t set up a clear agreement of how assets and income would be handled, or one party thought they had set things up clearly, only to find an action brought against him or her that was never anticipated. Unfortunately, such cases dragged on for years after the relationships ended.
I know you may be thinking, “well, what really could happen if we’re not married? Wouldn’t we just go our separate ways? What’s the big deal?” Well, buckle up because even though Connecticut has never had common law marriage—one of the issues I hear with some regularity—a partner can still make certain claims against the other’s assets and income, and just because it may be tough to prevail in some of these claims, getting to a settlement (versus going to court) can be time consuming and expensive.
One of the more common claims we see is that an oral contract was formed, which provided for sharing income and assets into the future. This ends up as a “they said/they said” argument to some extent, but oral contracts, if proven, can be as binding as written ones. Somewhat similar to this is the claim that a business partnership was formed, and the person suing is entitled to the assets of that partnership.
You can be accused of fraud. In other words, a partner can claim that the other partner somehow fraudulently induced them to live with him or her or they and gain access to their knowledge and efforts and are thus entitled to compensation and damages.
Another argument that I’ve also seen in my practice—and in some high-profile celebrity breakups—is the concept of “constructive trust.” In this case the claim is that one partner is legally holding the other’s assets. That partner somehow obtained control of the assets and is now denying them. The partner would then be unjustly enriched by not relinquishing the assets and instead keeping them for themselves. Since a constructive trust is implied rather than stated, there are four elements that must be proven: a confidential or fiduciary relationship, a promise, a transfer made on the basis of that promise, and unjust enrichment. Proving these can be messy. For instance, one partner may claim that they took care of property while the other earned the bulk of the alleged joint assets. That work, which benefitted both partners, could be called an asset that was transferred to the relationship, even though no actual money was involved. The argument, then, is that the partner against whom the action is being brought was unjustly enriched by the efforts of the one who brought the action. Did that really happen? If so, what was it worth? As you can probably see, there’s a lot of room (not to say a “yawning chasm”) for interpretation and argument, which is why cases of this nature can drag on over time.
Finally, with regard to property, if you choose to put a partner’s name on a real estate deed, you could be subject to an action of partition. The partner who brings the action would be entitled to half the asset, even if they never contributed a dime to it.
Now, the purpose of this is not to scare you off living together. Far from it. Couples need to address all the practical matters of their relationship in order to provide a strong foundation for growth and sharing; this is just one more component of that. In our next column, we’ll talk about the steps you can take to ensure clear understanding and protection for each person.
In the meantime, if you have questions, please click over to the Editor’s Corner on ctvoice.com, and we’ll answer questions of general interest.